Tuesday, June 26, 2012Last Update: 1:06 PM PT

Belated Medicare Money Fight Goes to Washington

WASHINGTON (CN) - A group of hospitals will head to the Supreme Court to fight Medicare underpayments more than a decade after the deadline for such appeals has passed. The Centers for Medicare & Medicaid Services miscalculated payments owed to 18 hospitals that treated Medicare patients from 1987 to 1994, but the mistake became public only after it was revealed in an unrelated 2006 lawsuit. Although the deadline for such claims had obviously passed long ago, the hospitals asked the Provider Reimbursement Review Board to provide equitable tolling and start the deadline 180 days from when they found out about the miscalculation. Equitable tolling can delay application of the statute of limitations when a plaintiff learns about an alleged injury after the deadline has already passed. The review board said it lacked jurisdiction to hear the case because the statutory 180-day deadline for standard appeals had elapsed, as had a good-cause deadline of three years. A federal judge agreed that the hospitals had failed to show any evidence in the Medicare statutes that Congress intended to authorize such tolling. But the D.C. Circuit reversed in June 2011, finding that precedent "made clear that the appropriate inquiry is just the opposite: whether there was good reason to think Congress did not want equitable tolling." (Emphasis in original.) The Department of Health and Human Services urged the Supreme Court to take up the case because it said the D.C. Circuit had mistakenly applied precedent favoring equitable tolling to a process that had gotten along without it for 40 years. "The exceedingly complex substantive and procedural framework for resolving Medicare payment claims through an administrative process has no analogue in the filing of a private suit in court," according to the agency's petition. Liability for the old payments would also be costly, the department warned. "If allowed to stand, the decision would impose a considerable administrative burden on HHS and would expose the Medicare Trust Fund to substantial and unpredictable liabilities for past cost years that have long since been closed," according to the petition authored by Solicitor General Donald Verrilli.